3 Mid-Cap Stocks That Blend Stability and Explosive Growth
Investing.com | Mar 06, 2024 09:32AM ET
- Mid-cap stocks strike a good balance between growth potential and stability.
- In this piece, we will explore promising opportunities with three mid-cap companies positioned for growth.
- These companies may provide stability along with higher-than-expected growth potential compared to the average mid-cap stocks.
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Mid-cap stocks can sometimes offer unique investment opportunities by combining growth potential with relative stability.
Unlike small caps, which can be risky yet offer significant growth potential, and large caps, which can be stable but provide slower growth prospects, mid-caps strike a balance between both.
This article delves into three mid-cap companies - all of which are positioned for hefty potential gains.
1. Helmerich and Payne
After posting stronger-than-anticipated Q1 results in January, Helmerich and Payne (NYSE:HP) experienced increases in price targets and positive revisions of estimates by analysts.
Piper Sandler raised its price target for Helmerich & Payne to $44.00 from $41.00, reiterating its Neutral rating.
Morgan Stanley increased its price target to $46.00 from $44.00, keeping an Underweight rating. Barclays adjusted its price target to $42.00 from $40.00, maintaining an equal-weight rating.
The trend in analyst EPS forecasts for Helmerich & Payne for the forthcoming quarter is showcased by InvestingPro’s EPS Forecast Trend, indicating an increase from $0.73 in January (before earnings announcement) to $0.87 at present.
Source: Investing.com
The Fair Value analysis suggests a potential 33.3% increase in the stock price, whereas Wall Street analysts project an average growth of approximately 17%.
Source: Investing.com
2. Darling Ingredients
Last week, Darling Ingredients (NYSE:DAR) reported EPS and revenue figures for Q4 that fell short of expectations.
Additionally, the company withdrew its EBITDA guidance for 2024, stating it would provide an update along with the Q1/24 results as visibility improves—a decision that initially negatively impacted the stock. However, the shares have since rebounded, erasing the initial losses and even posting slight gains.
In response to the announcement, several Wall Street firms revised their price targets downward for Darling Ingredients. Stifel reduced its price target to $95.00 from $120.00 but kept a Buy rating. UBS cut its price target to $72.00 from $75.00, also maintaining a Buy rating. BMO Capital decreased its target to $57.00 from $60.00, maintaining an Outperform rating, and noting:
We lower estimates, reduce our target to $57, and expect the shares to be limited in the near term. However, we reiterate Outperform as we see attractive risk/ reward with 2024 EBITDA likely north of $1.5 billion and a stronger earnings outlook beginning in 2025.
The company shares fell 38% since July 2023 highs following three consecutive earnings misses.
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